The perils of purchasing pre-construction condominiums

On Nov. 9, CBC News reported that land developer Castlepoint Numa could secure neither construction financing nor municipal development approvals for its Museum FLTS condominium project in Toronto’s Junction Triangle. The developer returned deposits to more than 100 purchasers and shut down the project.

In the pantheon of failed condominium projects, this one seems relatively benign. In 2014, the unscrupulous principals of Centrust Development Group, with the assistance of their lawyer, absconded with over $2 million in deposits from a cancelled Toronto condominium project. The lawyer...